1. What is Rental Yield?

Rental yield is a measure of the return on investment for a rental property, expressed as a percentage of the property's value. It's calculated according to UK government guidelines to help landlords and investors assess property performance.

2. How Does the Calculator Work?

The calculator uses the standard rental yield formula:

Where:

• Annual Rent — Total yearly rental income in GBP
• Property Value — Current market value of the property in GBP

Explanation: The equation shows what percentage of the property's value you earn back each year through rent.

3. Importance of Rental Yield Calculation

Details: Rental yield helps investors compare properties, assess investment performance, and make informed buying decisions. It's particularly important for buy-to-let investors in the UK property market.

4. Using the Calculator

Tips: Enter the annual rent in GBP/year and property value in GBP. Both values must be positive numbers. The calculator will compute the rental yield percentage.

5. Frequently Asked Questions (FAQ)

Q1: What is a good rental yield in the UK?
A: Typically, 5-8% is considered good, though this varies by location. London properties often have lower yields (3-5%) while northern cities may offer higher yields (7-10%).

Q2: Should I include expenses in rental yield?
A: This calculator shows gross yield. For net yield, you would subtract expenses from annual rent before calculating.

Q3: How often should I calculate rental yield?
A: Recalculate whenever rent changes or property value significantly changes to keep your investment analysis current.

Q4: Does this work for commercial properties?
A: The same formula applies, but commercial property yields are typically higher than residential.

Q5: Is higher yield always better?
A: Not necessarily - higher yields may indicate higher risk areas or properties needing more maintenance.